Appeal from the Circuit Court of Cook County; the Hon. John F.
Hechinger, Judge, presiding.
PRESIDING JUSTICE HARTMAN DELIVERED THE OPINION OF THE COURT:
Plaintiffs, Harry and Margaret B. Axelrod, are owners of a certificate of beneficial interest in the 860 Lake Shore Drive Trust (Trust). The Trust holds title to two 26-story cooperative apartment buildings located at 860-880 North Lake Shore Drive, in Chicago. As certificate holders among some 268 others, they were entitled to, and did, lease an apartment in one of the buildings. Responsibility for managing the Trust under the trust agreement is vested in a board of five managing trustees who, since 1978, have been elected to those positions by the certificate holders (beneficiaries). The managing trustees are required to be certificate holders and tenants of the building under the trust agreement. The present litigation commenced on March 15, 1979, when plaintiffs sued as defendants the corporate trustee, La Salle National Bank, and managing trustees of the Trust, alleging numerous breaches of trust in an amended 21-count complaint seeking a variety of forms of relief including money damages, injunctive relief, and construction and modification of the trust agreement against separate defendants in both their individual and official capacities. Each count alleged facts substantially distinct from the facts of the other counts. Each count ran through several pages, plus many pages of exhibits. Further amendments were filed after judgment.
Some counts were ruled upon pursuant to motions to strike, some upon motion for summary judgment, and one was decided after an eight-day trial. All issues were decided against plaintiffs. Plaintiffs appeal, raising as issues whether: certain counts were erroneously stricken and dismissed; the circuit court's grant of summary judgment for defendants on counts VI and XXI was appropriate; and the circuit court's decision in defendants' favor on count XX was contrary to the manifest weight of the evidence. The dismissal of counts filed against the corporate trustee bank has not been argued on appeal.
Certain common threads can be identified in the various legal theories presented. They may be placed in three categories, namely: (1) charges of a derivative nature which sought relief against individual defendants based on their former status as managing trustees of the Trust; (2) charges of a derivative nature which sought relief against individual defendants personally for the asserted benefit of the Trust; and (3) one non-derivative count which sought relief against the individual defendants for the individual benefit of plaintiffs.
The Trust was the subject of related litigation in 1977, when a class action was filed by beneficial owners against the corporate trustee and the managing trustees. Certain beneficiaries, including plaintiffs here, opted out of the class. Nevertheless, the Axelrods continued to appear regularly and actively in the proceedings. (Wool v. La Salle National Bank (1980), 89 Ill. App.3d 560, 562, 411 N.E.2d 1135.) During the course of the 1977 action, a new board of managing trustees was elected, who are defendants in the instant case. This new board petitioned the circuit court for instructions as to whether they should pursue any legal claims against their predecessors. In that case, Wool v. La Salle National Bank (Cir. Ct. Cook Cty., June 6, 1979), No. 77 CH 483, the circuit court issued an order prohibiting the new board from instituting such legal action against the predecessor managing trustees. That order was appealed to this court by certain beneficiaries. Plaintiffs here, the Axelrods, also filed an appeal which was dismissed as untimely filed, and the circuit court order was not disturbed. Wool v. La Salle National Bank (1980), 89 Ill. App.3d 560, 411 N.E.2d 1135.
On May 1, 1980, still another new slate of managing trustees, also tenants-owners of the Trust, as are plaintiffs and defendants, assumed office on behalf of the Trust. As a result of this change, none of the previously elected (1977) defendants remained in office. There is no claim in the record of any personal financial benefit accruing to these successor managing trustees as a result of a favorable outcome for defendants in this lawsuit, bad faith or abuse of discretion on their part. On September 4, 1981, after various derivative counts had been stricken and dismissed, the successor managing trustees submitted an affidavit to the circuit court, which formed a basis for defendants' motion for summary judgment on two of three remaining counts. This affidavit, in part, states as follows:
"1. We are the duly elected managing trustees of the 860 Lake Shore Drive Trust, and we are all managing trustees presently in office.
2. In connection with this litigation, we support all motions made and positions taken by the defendants. We oppose all motions made and positions taken by plaintiffs, except as the same may be agreed to by defendants.
3. We believe that termination of this lawsuit with judgment entered on all counts in favor of defendants is in the best interests of the Trust, for the following reasons:
b. This lawsuit has been a disruption to the Trust's orderly procedure. Plaintiffs' counsel have interrupted the normal routine of the building office to investigate documents. Defendants' counsel must confer with the La Salle National Bank, the building manager, and with the managing trustees about this case. They must review and sign affidavits. All of this takes time and effort for everyone concerned.
c. Even if plaintiffs should, by some remote chance, be successful in this case, the benefits which might be achieved for the Trust could not possibly compensate for the time and expense of litigation.
d. The publicity attendant upon this case can continue to diminish the value of the Trust and of the tenant/owners' equity. Some people may be reluctant to purchase an apartment in a building where the managers are the subject of litigation.
e. Most important of all, the present managing trustees wish to encourage certificate holders to run for the office of managing trustee. Particularly in light of the fact that the managing trustees receive no pay for their efforts, they do not want obstacles placed in the path of those who have volunteered to serve the Trust. They want to keep a difficult job from being even more onerous. They definitely do not want certificate holders to be dissuaded from running for office through fear that dissident tenant/owners might bring marginal or frivolous lawsuits against them."
Summary judgment on counts VI and XXI was thereafter granted. Following an eight-day trial, judgment for defendants on count XX was also entered. This appeal followed.
Plaintiffs assert that the circuit court improperly struck and dismissed counts I through V and VII through XIX of their second amended complaint for failing to state causes of action. These counts included charges of a derivative nature based both upon defendants' former positions as managing trustees ...